Brakes on HSBC car loans

National 1 minute, 59 seconds

BANDAR SERI BEGAWAN

CAR dealerships in the capital have been advised that HSBC is no longer providing car financing to their customers effective December 1, 2013.

Industry insiders who wished to remain anonymous said they received the notice prior to the effectivity date, and that the only two companies – Baiduri Bank and BIBD (Bank Islam Brunei Darussalam) At-Tamwil – will be offering hire purchase products to customers of car dealerships.

A spokesperson from BIBD At-Tamwil, Lim Sei Chin, marketing and public relations manager, said that future customers, who wish to gain hire purchase access through the banking arm, would not necessarily have to have their salaries deposited to BIBD.

“They would still be able to gain motor vehicle financing via BIBD At-Tamwil, and they can make monthly payments over the counter, or via cash deposit machines that are located across the Sultanate,” said Lim.

As of press time, no official statement could be had from HSBC regarding the removal of their hire purchase financing products.

Other banks like Standard Chartered Bank (SCB), which does not carry motor vehicle financing products, stated in an email response that business for the bank will remain as usual.

The Brunei Times tried to contact the Baiduri Bank Group to get confirmation on the financing processes for customers who do not have accounts in Baiduri, however, no spokesperson could be reached as of press time.

This is the latest change in operations from international bank HSBC (B) following the Autoriti Monetari Brunei Darussalam’s (AMBD) implementation of new lending and deposit rates. Shortly after the authority’s announcement, HSBC froze applications and then lifted the suspension on application in April this year.

The bank has restructured its home mortgage products with a new repayment period of 10 years as a result of the new rates, and a maximum financing of 70 per cent of the property’s value, and customers will now have to shell out the remaining amount on their own.

Previously, the bank loaned up to 100 per cent of the value of the property, but after the amendment in their mortgage product, subsidies that used to amount to a maximum of $15,000 (which included land valuation, insurance and others) have also been taken away.

In April, the bank said that they have confirmed revising its mortgage lending rates based on the new regulation issued by the AMBD with the effective interest rates of 4.5 per cent.

The Brunei Times